International Campus launches a fund for student housing,
capitalizing on its existing platform and deep pipeline
- Luxembourg vehicle will build up a portfolio of up to €800 million investment volume
- First closing of €50 million equity realized
- In total an amount of €250 million Euro equity will be collected
- Eight “THE FIZZ” residential buildings for students with more than 2,400
apartments are being realized in seven cities
Aiming to further develop its platform for student
accommodation, International Campus AG, the Munich specialist for developing and
operating modern student residences, has incorporated in Luxembourg International
Campus Student Housing I S.C.A. (the “Fund”) for professional investors. The purpose
and objective of the Fund is the creation of a larger portfolio of residential buildings
for students, primarily in Germany. These will be developed by
International Campus AG and predominantly operated with uniform quality
standards under the brand “THE FIZZ”.
“We have raised €50 million of equity in a first closing and therewith enter directly
into the investment stage. Talks with a number of further equity investors are
currently underway”, explains Horst Lieder, CEO of International Campus AG. All-in-
all, International Campus AG plans to raise up to €250 million in Fund commitments.
“We plan to raise at least up to €250 million equity. This would allow us to build a
portfolio with a total investment volume of up to €800 million. Financing conditions
in Germany are currently very favourable in comparison with other countries both in
terms of interest rates and access to credit. International Campus AG will also invest
in the portfolio by committing 5% to 6% of the capital of the Fund. This ensures full
alignment of interests between investors and International Campus as the developer,
operator and ultimately a fellow investor”, continues Lieder.
It is planned to develop properties within the Fund over the next 3–5 years and exit
within 5 to 7 years. Attractive risk-adjusted returns with a target yield (IRR) of 14 %
on the equity are expected. “The strategy of creating a platform of this nature for a
large-volume portfolio in the area of student housing provides an attractive product
for institutional investors that is unlike anything currently available in Germany for
this segment. This is another step forward in providing access for investors to student
housing in Germany as a standalone asset”, adds Rolf Engel, chairman of the board of
International Campus AG.
Seven projects in six TOP cities secured for International Campus AG’s Luxembourg
The ongoing project developments of International Campus AG and investments
made in this context are all earmarked for the Luxembourg Fund. This includes:
- Bremen: International Campus AG has acquired “THE FIZZ Bremen” with 336 student apartments, a building that International Campus AG developed and operates. The FIZZ Bremen was completed in 2012 and is fully let.
- Berlin: Jointly with the Berlin family business Gädeke & Sons, International
Campus AG is developing “THE FIZZ Berlin” with 212 apartments;
construction has already started. The first students will move in in the winter
semester of 2014.
- Frankfurt: A converted office building, “THE FIZZ Frankfurt” in the
Gallusviertel district will provide 382 student apartments offering the same
quality as a new building. The start of construction is imminent and opening
is scheduled for October 2014.
- Frankfurt: Close to the Sommerhoffpark, “THE FIZZ Frankfurt II”, with ca.
390 apartments, is being developed by International Campus AG jointly with
the Berlin family business Gädeke & Sons and OFB Projektentwicklung GmbH
as total contractor. Opening is scheduled for October 2015. International
Campus AG is currently coordinating with the city of Frankfurt as part of the
- Darmstadt: A preliminary building permit has been issued for this property,
which was recently acquired by International Campus AG. “THE FIZZ
Darmstadt” will provide ca. 350 apartments and is expected to be ready for
occupancy by October 2015.
- Hanover: In Hanover, International Campus AG has taken over a project at an
advanced stage of development. “THE FIZZ Hannover” will provide 302
apartments. Construction is slated to start shortly and the building is
scheduled to open in summer semester 2015.
- Hamburg: In Hamburg, International Campus AG is developing
“THEFIZZHamburg” jointly with the Hanseatic Group as part of a larger
overall development. The building with ca. 292 apartments will be ready for
occupancy for the winter semester of 2015.
Besides these Fund projects, International Campus AG expects to operate an eighth
residential building for students that has been built by the GbR GEWO Stuckert
Wohnbau AG in Freiburg; the individual apartments are expected to be sold to private investors in part ownership. The building work for “THE FIZZ+ Freiburg” with 149 apartments in two construction stages is already quite advanced. The topping-
out ceremony for the first construction stage will take place on 17 October 2013. The
first students can then move in by the summer semester of 2014.
Once these eight student residences are opened, International Campus AG will be
operating more than 2,400 apartments in seven cities.
In addition to this, International Campus AG is also reviewing the feasibility of other
projects for expanding the portfolio from its existing pipeline of locations in large
university cities in western Germany. “This ensures that we can make efficient and
sustainable use of the currently highly favourable time window for this kind of
investment”, says Lieder.